New Jersey Appellate Court Refuses To Enforce Nursing Home Arbitration Agreement

162017_132140396847214_292624_nOn June 9, 2016, the Superior Court of New Jersey Appellate Division (“Appellate Court”) issued a published opinion in which it reversed the trial court’s order requiring the parties to arbitrate the plaintiff’s nursing home negligence claims, holding that the arbitration process contemplated by the clause in question was not available when the parties executed their contract.

Plaintiff’s Alleged Facts

The plaintiff is the brother of an 85-year-old nursing home resident who was still suffering from the consequences of the trauma she had endured at a nursing facility operated by the other defendants when he sought her admission at the defendant’s nursing home through a power of attorney. An individual in the admissions office presented him with a stack of papers, of which the admission agreement was one of several documents, and he was told to sign and initial wherever indicated. The plaintiff alleged that he was then left alone to do so, without any further explanations or instructions.

One of the documents signed by the plaintiff on behalf of his elderly sister was the defendant’s arbitration clause that stated in upper case and bold lettering: “Any controversy or claim arising out of or relating to this agreement and brought by the resident, his/her personal representatives, heirs, attorneys or the responsible party shall be submitted to binding arbitration by a single arbitrator selected and administered pursuant to the commercial arbitration rules of the American Arbitration Association [“AAA”] … Any claimant contemplated by this paragraph hereby waives any and all rights to bring any such claim or controversy in any manner not expressly set forth in this paragraph, including, but not limited to, the right to a jury trial.”

The plaintiff alleged, “No one told me, and I did not notice, that the agreement contained a waiver of my sister’s civil rights, including her right to a jury trial and her right to appeal any adverse decision to an appellate court. I also was not told that my sister would have to pay for one-half the cost of the arbitration. In fact, the admission person said nothing to me about the contents of the agreement, except that I had to sign it for my sister, and that I had to sign it right away because my sister was being admitted to that nursing home.

“No one told me that I had a right to consult with counsel before signing or that my sister’s admission to the facility was not contingent upon my signing the agreement. If I had understood that such a provision was contained in the admission agreement, I would have asked for an explanation so I could understand what this provision meant. If I had been told that by signing I would not only give up her right to a jury trial, but also would waive her right to appeal from any decision, and that she would have to pay for one-half the cost of any proceeding to determine whether [the defendant nursing home] was negligent or caused her injury, I would certainly have asked whether I was required to agree as a condition of her admission, and I would probably have spoken with an attorney to fully understand the effect of this agreement … ”

Nonetheless, the trial court ordered that the plaintiff’s nursing home negligence claims be arbitrated. The plaintiff appealed.

The Appellate Court stated that the Federal Arbitration Act (“FAA”), 9 U.S.C.A. §§ 1-16, which the Supreme Court of the United States broadly construes in favor of arbitration, overrides all state policies and concerns, including the New Jersey Nursing Home Act’s express prohibition against the enforcement of such agreements, N.J.S.A. 30:13-8.1.

The Appellate Court held that the arbitration clause in the case it was deciding unambiguously declares the resident’s waiver of the right to pursue a claim in any fashion other than as set forth, but other aspects of the clause suggest it may be unconscionable. The Appellate Court stated that the application of New Jersey’s common law unconscionability principles would not create an obstacle inconsistent with FAA principles.

In the case it was deciding, the Appellate Court reversed the trial court’s order compelling arbitration of the plaintiff’s nursing home negligence claims, holding that the arbitration process contemplated by the clause in question was not available when the parties executed their contract. In opposing the motion to compel arbitration, the plaintiff provided a certification, which authenticated an attached AAA statement that unequivocally expressed that, as of January 1, 2003, AAA would “no longer accept the administration of cases involving individual patients without a post-dispute agreement to arbitrate.” Consequently, when the parties contracted, their exclusive forum for arbitration was no longer available; there being no agreement to arbitrate in any other forum, arbitration could not be compelled. In short, even assuming the clause was otherwise enforceable and consented to by plaintiff, there was no meeting of the minds as to an arbitral forum if AAA was not available.

The Appellate Court held that because AAA was not available to administer the arbitration of this dispute at the time the contract was formed, or even at the time the trial court ruled on the application, the trial judge mistakenly compelled arbitration of the plaintiff’s personal injury claims against the defendant.

Source Kleine v. Emeritus at Emerson, Brea Emerson, LLC, Docket No.: a4453-14.

If you or a loved one suffered injuries (or worse) while a resident of a nursing home in New Jersey or in another U.S. state due to nursing home neglect, nursing home negligence, or nursing home abuse, you should promptly find a local nursing home claim lawyer in your U.S. state who may investigate your possible nursing home claim for you and file a nursing home claim on your behalf, if appropriate.

Click here to visit our website to be connected with medical malpractice lawyers (nursing home claim lawyers) in your U.S. state who may be able to assist you with your nursing home claim, or call us toll-free in the United States at 800-295-3959.

Turn to us when you don’t know where to turn.

This entry was posted on Saturday, July 23rd, 2016 at 5:11 am. Both comments and pings are currently closed.

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